Rent Responsibly: Understanding Your Residential Lease

When you’ve spent hours searching real estate rental websites and touring more places than you can remember, it’s tempting to want to snatch the keys from the landlord and sign whatever necessary to secure the right space.

But while renting an apartment or home may fall lower on the commitment scale than buying one, a rental lease still delineates a set of obligations and rights that are important to not only read, but also fully understand before you agree to them.

Here’s a look at a few of the typical elements of a residential lease, as well as some of the more nuanced provisions to look out for in the paperwork.

FUNDAMENTALS: WHO, WHAT, WHEN

A residential lease agreement is between the owner/manager of a property (known in legalese as the “lessor”) and the tenant (the “lessee”) to establish the terms of the tenancy. As such, it should always delineate these fundamentals:

Names and contact information of the lessor and lessees

Address (including unit number) and a basic description of the property to be rented

Length of the tenancy (with specific dates, typically amounting to a year)

Amount and due dates of monthly rent, as well as timelines and penalties for late payment

Whether the landlord is responsible for utilities (and if so, whether he/she will set limits upon your utility usage)

Amount, due date, and conditions surrounding return of a security deposit

Rules and any associated fees/security deposits for pets, smoking, etc.

Responsibility for repairs and general upkeep of the property

These make up the bare minimum when it comes to a sound residential lease. If you find any of these terms to be missing from your lease, consider it a red flag and bring it up with the property owner/manager immediately.

KNOW THE POTENTIAL NUANCES

Often, you or your landlord will want more than the bare minimum for your lease agreement. If you see one of the clauses below in your lease, make sure you understand it fully. If you don’t see one of these in your lease, consider whether you’d like to negotiate the agreement to include it before you sign.

Lease break procedure and fees: Landlords and management companies often charge a fee for the early termination of your lease (from a couple month’s rent up to the remainder of the lease term). Do keep in mind, however, that in many states landlords also have a “duty to mitigate,” meaning they must make a reasonable effort to re-rent the property and eventually release you from your financial obligations.

Automatic renewal clause: Some agreements will stipulate that you are expected to leave the property on the end date of the lease, and others will state that the lease is automatically renewed (often on a month-to-month basis thereafter). Pay attention to which (if any) of these scenarios is spelled out, as well as whether you must provide written notice of your intent to move.

Modifications: If you have your heart set on red dining room walls, you’ll want to check whether the lease has any provisions about making significant changes to the property. Sometimes exceptions can be made ahead of time, but make sure that before you start knocking down walls, you get it in writing in the lease.

Sublet provisions: Summer internship, sudden career change, crazy roommate… there are dozens of reasons why you might end up wanting to sublet your place for a few months. Many residential leases have provisions — voidable by state law in some cases — that affirm whether sublets are permitted and any related protocol. They may answer questions like: Does your roommate have to agree to having a subletter? Do they get any discretion over who you sublet to? To whom does the subletter pay monthly rent? Read for these carefully, because it could mean the difference between recouping three month’s rent or losing it entirely.

Damage and destruction clause: Damage and destruction (D&D) clauses spell out if and how a landlord would be responsible in case of a natural disaster. If you’re on the fence regarding whether to get renter’s insurance, the terms associated with this clause may help sway you one way or the other.

SIGN AND SEAL IT

Once you’ve carefully read over your lease and made any necessary changes, make sure you, your landlord, and any roommates you may have add their signature to the lease (if a roommate’s name is not on the document, they are not legally liable for the rent).

Finally, keep a copy of your lease for future reference and rest easy in your new digs knowing that you fully understand every word of it.

Lauren optimizes Shake’s email marketing and engagement efforts. Prior to working with Shake, Lauren analyzed new user engagement for Change.org and worked for startups and social enterprises in Hong Kong. Lauren holds a degree in Philosophy from the University of Pennsylvania, where she wrote her senior thesis on the ethics of the death penalty and watched all sixteen seasons of Law & Order: SVU.